University of Vermont HEALTH NETWORK

- --THE--- University of Vermont HEALTH NETWORK University of Vermont Health Network Obligated Group Bond Disclosure Report Fiscal Year 2018 Hospital Results, Financial Statements and Key Ratios For the Period Ended December 31, 201 7

- --THE--- University of Vermont HEALTH NETWORK University of Vermont Health Network Obligated Group Bond Disclosure Report Fiscal Year 2018 Officer Certificate For the Period Ended December 31, 201 7

University of Vermont Health Network Obligated Group OFFICER'S CERTIFICATE PURSUANT TO THE AMENDED AND RESTATED MASTER TRUST INDENTURE AND ALL SUBSEQUENT SUPPLEMENTAL INDENTURES Quarter Ended December 31, 2017 I, Todd Keating, DO HEREBY CERTIFY that: 1. I am the Chief Financial Officer of University of Vermont Health Network, Inc. and an obligated group representative under the Amended and Restated Master Trust Indenture dated as of March 1, 2004 (the "MTI"), by and between University of Vermont Medical Center and People's United Bank, as Master Trustee, as amended by Supplemental Indentures dated as of or since March 1, 2004 (the "Supplemental Indentures"). 2. Attached is a true, correct and complete copy of University of Vermont Health Network Obligated Group's Unaudited Financial Statements for the quarter ended December 31, 2017. 3. University of Vermont Health Network Obligated Group is in compliance with Section 3.07(e) of the MTI as of December 31, 2017. 4. To the best of my knowledge, the Obligated Group is not in default in the performance of any covenant contained in the MTI or Supplemental Indentures. All terms used herein but not otherwise defined shall have the meanings given to them in the MTI and/or the Supplemental Indentures. Witness my hand this?(.,fl, day of February, 2018. Todd Keating Network CFO University of Vermont Health Network {60345931.1 11 080-0017}

- --THE--- University of Vermont HEALTH NETWORK University of Vermont Health Network Obligated Group Bond Disclosure Report Fiscal Year 2018 Financial Narrative For the Period Ended December 31, 201 7

UNIVERSITY OF VERMONT MEDICAL CENTER FINANCIAL RESULTS ANALYSIS DECEMBER 31, 2017 Hospital: December's operating margin at $3.9M was favorable to budget by $877K, driven by higher than budgeted net patient service revenues. Year to date operating margin of $7.3M was favorable to budgeted margin of $6.5M. Inpatient volumes were below budget for the month by I I or (0.6%), with unfavorable performance in Surgery, Womens and Childrens. Medicine was above budget by 57 or 6.9%. December's CMI of 1.67 was above November's final CMI of 1.65. Average length of stay was 5.79, below budget for the month by (2.3%). Outpatient volumes were generally positive for the month, with only the Cath Lab trailing budget by (5.0%) or more. Only OR Minor Cases trailed budget year to date by (5.0%) or more, though OR Major Cases outperformed budget and exceeded the underperformance in Minor Cases. Total unrestricted revenues were above budget by 6.7%, primarily driven by the favorable net patient service revenues and outpatient specialty pharmacy. YTD total unrestricted revenues were favorable by 3.6%. The overall monthly expense variance was unfavorable by (5.7%) due to other expenses (timing to budget) and salaries due to FTEs. YTD expenses were unfavorable by (3.4%). Medical Group: In accordance with the physician compensation plan, the margin of the Medical Group was reported at break-even. Month to date net patient service and FPP revenue was unfavorable to budget by ($I.3M) or (5.1 %). YTD net patient service and FPP revenue was favorable by 3.3%. Worked RVUs underperformed budget for the month by (7.5%) and by (0.8%) year to date. Total unrestricted revenues were (4.4%) below budget for the month and 2.5% above budget year to date. Expenses were favorable to budget by 4.4% for the month, driven by lower than projected physician salaries and fringe. YTD expenses were favorable 2.5%. UVMMC Non-Operating Revenue: The non-operating gain of $9.3M was driven by realized income of $8.9M and investments in affiliates within Other. YTD non-operating gains were $10.2M. December's net unrealized losses $3.5M) due to the recognition of realized income from the sale of investments. Year to date net unrealized gains on investments were $5.8M. YTD transfers of net assets of($ I.3M) were due to IS projects paid by the Medical Center, but owned by other affiliates. Operational Metrics: Days cash on hand at the end of December was 2 I 8 days, down I day from November reporting. Operating margin year to date of2.34% was above the budget of2.16%.

Central Vermont Medical Center Financial Results Analysis Fiscal Year to Date December 31, 2017 December Performance Summary: In December, CVMC's operating gain of $106K exceeded the budget by $29K. On a fiscal year to date (FYTD) basis we are trailing the budget by $371K and ended with a margin of 1.2%. Net patient revenue, including the fixed prospective payments fell flat with the budget for December. Net revenue is negatively impacted by unfavorable payer mixes and an increased utilization of the Medicaid ACO volumes, which were both seen during the first three months of the fiscal year. The 340b contract pharmacy program contributed $373K to other revenue in December and a FYTD amount of $1.5M. Investment income of $774K and $523K in unrealized gains on our investments contributed to the overall increase of our unrestricted net assets of $2.4M. Gross Revenue and Volumes: Gross revenue for December exceeded the budget by $ l 97K or 1 %. CVH was the primary driver contributing $396K of the favorable variance, led by Pharmacy $367K, Surgical Services $125K and Radiation Oncology $367K. This was offset by unfavorable variances in Emergency Services $263K, Med/Surg $135K and Women's & Children's $148K. Medical Group Practices gross revenue is over budget by $ l 69K for December and FYTD by $I.3M. The December variance is led by both Express Care Practices of $221K, and the combined Ortho practices of $142K. Overall practice visits are under budget by 3%, as December saw a negative 11 % variance in visits, from the budget. Woodridge Nursing Home gross revenue fell behind budget by ($369K) for December and FYTD of ($902K). Volumes continue to trend below budget and ended December under budget by 16%. Operating Expenses: Total operating expenses for December were unfavorable to budget by ($199K) and FYTD by ($1 M) or (2%). Salary expense exceeded the budget on a FYTD basis by ($990K) or (4%). At the end of December we were running over budget by 29 FTE's causing the majority of the variance. Benefit expenses on a FYTD basis are below budget by $739K or 11 %. The leading 2 factors are a decrease in the FYI 8 pension expense of approximately $1.0M due to the annuity purchase that occurred in September 2017 and a reduction of the group health insurance by funds sent to CVMC from UVMMC for individuals seen at UVMMC and covered under CVMC's group insurance coverage. Total non-salary expenses are over budget by ($1l7K) for December and FYTD of ($768K) or (5%). The most significant drivers are the pharmaceuticals and medical supplies expense with a FYTD negative variance of ($820K) and ($3 89K), respectively. A portion of this variance is directly related to the favorable variances in Pharmacy and Surgical Services gross revenue. Notable Balance Sheet Items: Days cash on hand at the end of December was 109 days, up 4 days from November. Net days in Accounts Receivable increased by 3 days from November and closed the month at 56 days.

- --- ~,,l ---- - University of Vermont HEALTH NETWORK Champlain Valley Physicians Hospital UVM Health Network - Champlain Valley Physicians Hospital December 2017 Our operating margin for December was a loss of ($987,665) or -3.7% compared to a budget of ($65,057) or -0.2%. Inpatient: Inpatient net service revenue was below budget by 5.8% attributable to admissions being lower than budget (7 41 vs. 816). This was offset by a higher case-mix ( 1.27 vs. 1.25) and the decrease in contractual allowances associated with large balance accounts ($400k). 35.0 30.0 25.0 20.0 15.0 10.0 5.0 ADMISSIONS & OBSERVATIONS PER DAY......._... - - -.. c::=:=:j 2018 Admissions c::=:=:j 2018 Observation _,... 2017 Total - - 2017 Admissions OCT DEC FEB APR JUN AUG Outpatient: Outpatient net service revenue was 1.0% below budget for the month. The unfavorable variance was related to lower than expected volumes for endoscopy, MRI, diagnostic radiology, minor ambulatory surgery procedures, and the emergency department. This was offset by a favorable volume variance for radiation oncology and a decrease in contractual allowances reflecting a revised estimated payment percentage ($250k). Physician Revenue: Physician net service revenue was below budget by 4. 7% due to lower volumes for general surgery, psychiatry, plastic surgery and electrophysiology. Favorable variances occurred for the hospitalists and endoscopy.

Total Operating Revenue: Allowances for courtesy discounts, charity care and bad debts, in total, were less than budget by $344,000 primarily due to timing. Year-to-date activity is consistent with the prior year. Other operating revenue was above budget by 70.1 % due to the unbudgeted receipt of a $745,000 from the NYS DOH for the Vital Access Provider program, as well as funding for the X-ray school and other grant revenues. Expenses: Expenses in total were 5.0% above budget ($27,900,393 vs. $26,571,635). Notable variances occurred as described below: Salaries/contracted providers/locums: Over budget by approximately $1,387,000 or 9.9%. The variance is comprised of three components: 1) increased staffing costs of approximately $755,000 primarily due to a longer length of stay, 2) increased contracted and locums physician costs in excess of budget by $382,000 and 3) increased agency staff of $250,000. The higher staffing costs were primarily driven by higher FTE's (+33) and premium labor (+$400k) associated with an increased census. Contracted and locum cost variances occurred for pulmonology ($165k), anesthesia ($145k), gastroenterology ($101 k) and psychiatry ($84k). These were offset by lower costs for the emergency department ($95k), cardiology ($43k) and interventional radiology ($37k). Unfavorable agency cost variances occurred in medical oncology ($67k), maternity ($58k) and nursing. Medical and Surgical Supplies: Under budget by approximately $92,000 or 4.9%, primarily related to lower volumes for ambulatory surgery. Purchased services exceeded budget by $401,000 related to information technology costs ($199k) and consulting expenses for a market compensation analysis ($99k) and the review of certain hospital based physician services ($66k). Maintenance and repair costs were below budget by $195,000 due to timing. Depreciation expense was below budget by $69,000 due to the timing of asset additions and the recognition of depreciation in accordance with the half-year method. Balance Sheet: The days of revenue outstanding in Accounts Receivable decreased from 46 to 45 days and days cash on hand increased from 52 to 53. The increase in days cash on hand is primarily related to the decrease in accounts receivable. Scott St. George Senior Vice President/Chief Financial Officer

- --THE--- University of Vermont HEALTH NETWORK University of Vermont Health Network Obligated Group Bond Disclosure Report Fiscal Year 2018 Financial Statements and Key Ratios For the Period Ended December 31, 2017

The Universit y of Vermont Health Network OBLIGATED GROUP Balance Sheet For The Period Ending December 3 1, 2 0 1 8 UVMMC Account Account Description UVM MC CVMC CVPH ECH OB GROUP ASSETS Current Assets: Cash and Cash Equivalents Patient Accounts Receivable, Net Due From Related Parties 139,077,930 148,510,949 12,380,998 9,795,273 27,853,602 6,989,823 37,676,325 0 9,713,643 4,014,984 363,396 165,576,670 218,055,860 12,744,394 Short Term Investments - Restricted 12.426,318 12.426,318 Short Term Investments - Unrestricted Inventory (at Lower of Cost or Market) Current Portion of restricted assets Estimated Receivables from Third Party Payors Prepaids and Other Current Assets Total Current Assets 27,098,527 26,133,122 703,253 25,175,227 391,506,325 4,588,385 2,394,200 44,631,460 11,480,199 5,366,744 1,000,000 7,493,527 70,006,619 349,381 762,018 15,203,421 11.480,199 37,403,038 27,133,122 703, 253 35,824,972 521,347,826 Assets limited as to Use: Board Designated Assets Funds Held by Trustee Restricted Assets Donor Restricted Assets for Specific Purposes Donor Restricted Assets for Permanent Endowment Total Assets limited as to Use 550,547,216 4,722,936 35,871,394 29,954,354 621,095,899 52,152,576 23,997,669 3,996,215 630,693,675 13,934 4,736,870 7,427,685 7,427,685 6,254,105 42,125,499 3,404,468 14,740 33,373,561 61,811,149 31,439,287 4,010,955 718,357,290 Property and Equipment: Property and Equipment, Net Total Property and Equipment 504,250,988 504,250,988 70,926,468 102,155,632 21,169,318 698,502.406 70,926,468 102,155,632 21,169,318 698,502,406 Other Assets: Long Term Investments Notes & Other Receivables Investment in Affiliated Companies Pledges Receivable, Net Other Assets Total Other Assets 23,405,541 41,060,374 3,661,999 68,127,914 4,493,891 56,534 4,550.426 4,574,039 72, 210 28,051,790 1,869,987 42,930,362 3,661,999 2,525,061 2,525,061 4,574,039 8,888,940 128,744 81,719,637 Tota I Assets LIABILITIES AND NET ASSETS Current liabilities: line of Credit Current Installment of Long Term Debt Accounts Payable Accrued Expenses Accrued Payroll and Related Benefits Estimated Third Party Payor Settlements Due to Related Parties Est. Incurred but Unreported Medical Claims Total Current liabilities 1,584,981,126 17,046,290 16, 291,411 51,834,975 69,554,605 3,601,589 (0) 6,791,723 165,120,593 181,943,116 212,490,478 40,512,438 2,019,927, 159 CVMC CVPH ECH ol:ic!;miij 2,893,677 5,151,568 394,746 25,486,280 3,454,401 4,711,826 446,585 24,904,223 6,517,435 4,834,9 22 208,450 63, 395,782 9,991,338 22,057,529 1,764,555 103, 368,027 3,412,579 5,791,856 1,147,744 13,953,769 13,900 1,721,019 180,574 1,915,493 0 750,000 0 7,541,723 26,283,330 45,018,720 4,142,654 240,565,297 Other liabilities: Long Term Debt, excluding current installments Interest Rate Swap liability Malpractice and Workers Compensation Claims, Net Pension and Post Retirement Benefit Obligations l T Estimated Third Party Payor Settlements LT Est. Incurred but Unreported Medical Claims Other Long-Term liabilities Total Other liabilities Total liabilities 465,392,271 (0) 2,588,150 14,891,044 6,256,126 14,015,413 503,143,004 668,263,597 15, 364,525 49,014,714 9,202,097 538,973,606 8,107,687 323,936 8,431,623 2,198,206 7,100,116 72,210 9,370,532 30,586,488 50,834,523 30,150 84,039,311 14,891,044 6,256,126 14,700,403 1,169,487 2,843,640 32,728,944 62,849,621 116,226,527 12,472,033 694,691,186 89,132,952 16l,24S,247 16,614,687 935,2S6,483 Net Assets: Unrestricted Temporarily Restricted Permanently Restricted Retained Earnings 844,707,644 42,055,532 29,954,354 916,717,529 8 3,030,022 48,031,300 22,582,257 998,351,224 6,375,675 1,869,987 1,300,754 51,601,948 3,404,468 1,343,943 14,740 34,717,504 92,810,165 51,24S,231 23,897,751 1,084,670,676 l,s84,981,126 181,943,116 212,490,478 40,S12,438 2,019,927,159

The University of Vermont Health Network UVM MC OBLIGATED GROUP INCOME STATEMENT AS OF 12/31/17 Account UVMMC UVM MC CVMC CVPH ECH OB GROUP Net Patient Service Revenue Total Other Revenue TOTAL UNRESTRICTED REVENUE & OTHER Salaries, Payroll Taxes, and Fringe Benefits Non-Salary Expense Medical & Surgical Supplies Cost of Goods Sold-Outpatient Pharmacy Pharmaceuticals Nutrition Supplies Other Supplies Purchased Services Maintenance and Repairs Lease and Rental Utilities Other Expenses Insurance Depreciation and Amortization Interest Expense Provision for Bad Debts Provider Tax Expense Internal Expense Allocation Shared Services Total Non-Salary Expense TOT AL EXPENSES NET INCOME (LOSS) FROM OPERATIONS Income (Loss) Mar_qin Non Operating Revenue (Expense) Investment Income & losses on Investment Unreal Gain in Interest Rate Swap Contract l oss on Extinguishment of Debt Assets Released and Contributions Other Excess (Deficiency) Of Revenues Over Expenses Net Unrealized Gain/(Loss) on Investments Other Non Operating Gain I (Loss) INCREASE/(DECREASE) UNRESTRICTED NET ASSETS 279,650,988 45,758,410 27,083,062 3,381,353 313,468,318 51,586,635 189,579,931 34,821,142 21,271,434 2,710,855 6,794,580 18,718,186 3,641,315 1,293,118 410,414 1,287,239 258,788 12,153,626 1,793,365 13,050,253 1,281,875 3,531,896 648,118 2,857,120 663,920 16,691,965 1,410,046 3,053,468 176,567 12,324,788 2,447,160 3,612,563 136,588 262,879 188172.03 0 (351,479) 392,202 116,551,636 16,159,384 306,131,566 50,980,526 7,336,752 606,109 2.3% 1.2% 10,230,013 773,536 614,609 62,845 (730,243) 456,309 17,513,975 1,835,955 5,760,227 522,673 ( 1,208,665) 22,065,538 2,358,627 77,155,310 6,829,332 409,394,040 4,923,345 552,893 35,940,653 82,078,655 7,382,224 454,515,833 56,971,930 4,586,030 285,959,033 5,381,292 138,163 29,501,744 6,794,580 5,784,071 437,106 28,580,679 480,124 2,183,656 630,178 38,861 2,215,066 4,203,157 781,052 18,931,201 1,671,560 230,072 16,233,760 622,032 4,802,046 556,291 97,037 4,174,367 954,171 184,883 19,241,065 795,652 46,834 4,072,520 3,783,708 580,500 19,136,156 611,539 85,711 4,446,401 262,879 0 188172.03 0 370,908 36,552 448,183 25,844,683 2,656,772 161,212,474 82,816,613 7,242,802 447,171,507 {737,958) 139,422 7,344,325-0.9% 1.9% 1.6% 686,219 (7,222) 11,682,546 341,023 56,788 1,012,420 240 63,085 394 (273,540) 289,678 189,228 19,828,836 (34,817) 80,475 6,328,558 (1,208,665) 254,862 269,703 24,948,729 File: Income Statement 2/23/2018 9:38 AM Page 1 of1

University of Vermont Medical Center Obligated Group For the Period Ended December 31, 2017 Covenant - Debt Service Coverage Ratio* ($in OOO's) Unaudited ~ ~ UVMMC Obligated Yflj ~ Group NET INCOME (LOSS) FROM OPERATIONS $ 61,876 $ (523) TOTAL NONOPERATING REVENUE (EXPENSE) $ 64,145 $ 1,086 EXCESS (DEFICIENCY) of REVENUES OVER EXPENSES $ 126,021 $ 563 $ 2,751 $ 2,275 $ 66,380 $ 926 $ 4 $ 66,162 $ 3,678 $ 2,280 $ 132,541 Depreciation $ 48,864 $ 8,949 Interest Ex 11ense $ 14,308 $ 545 Income Available for Debt Service $ 189,193 $ 10,057 $ 15,708 $ 2,153 $ 75,674 $ 2,51 2 $ 270 $ 17,635 $ 21,898 $ 4,703 $ 225,851 Maximum Annual Debt Service (MADS) $35,431 $3,699 Debt Service Covera9e Ratio 5.34x 2.72x $3,938 $736 $43,491 5.56x 6.39x 5.19x Consultant Call: <1.35x Event of Default: <1.00x Compliance: YES YES 'Calculaled on roliling 12 month basis YES YES YES lnclud es in1j1sstment Income & losses on Investment" and "Other" (excludes unrhlzed galn/lou on swaps, and k>ss on extiogui:shment of debl)

University of Vermont Medical Center Obligated Group For the Period Ended December 31, 2017 Liguidih: Covenant Dall:S of Operating Expense ($in OOO's) Unaudited UVMMC CVMC l!!'.t! ECH UVMMC Obligated Group Cash and Cash Equivalents $139,078 $7,982 $6,990 Board Designated Assets* $550,548 $51,404 $35,478 Total Cash Available $689,626 $59,386 $42,468 Total Expenses $1,199,445 $183,020 $327,520 De11reciation $48,864 $8,949 $15,708 Adjusted Operating Expenses $1,150,581 $174,071 $311,812 Days in Period 365 365 365 Daily Operating Expenses $3,152 $477 $854 Da)'.s Cash on Hand Ratio 219 da)'.s 125 da)'.s 50 da)'.s $9,714 $163,764 $3,996 $641,426 $13,710 $805,190 $28,515 $1,738,500 $2,153 $75,674 $26,362 $1,662,826 365 365 $72 $4,556 190 da)'.s 177 da)'.s Consultant Call: <90 days Event of Default: <55 days Compliance: YES YES NO include unrestricted STI forcvph YES YES

University of Vermont Medical Center Obligated Group For the Period Ended December 31, 2017 Covenant -Total Debt to Ca~italization Ratio ($in OOO's) Unaudited UVMMC CVMC CVPH ECH Current Installment of Long Term Debt $17,046 $2,894 $5,152 $395 Long Term Debt, excluding current installments $465,392 $15,365 $49,015 $9,202 Total Debt $482,438 $18,259 $54,167 $9,597 Net Assets (Unrestricted) $844,708 $83,030 $48,031 $22,582 I Debt to Capitalization Ratio 36.35% 18.03% 53.00% 29.82% UVMMC Obligated Group $25,487 $538,974 $564,461 $998,351 36.12% Consultant Call: > 70% Event of Default: > 75% Compliance: YES YES YES YES YES

---THE--- University of Vermont HEALTH NETWORK University of Vermont Health Network Obligated Group Bond Disclosure Report Fiscal Year 2018 Statistical Information For the Period Ended December 31, 201 7

The University of Vermont Health Network The University of Vermont Medical Center OBLIGATED GROUP KEY STATS AS OF 12/31/17 HOSPITAL Inpatient Discharges 5,422 1,088 Inpatient Admissions 5,436 1,034 Inpatient ED Visits 2,428 Total ED Visits 14,432 5,836 Hospital Outpatient Billed Visits 92,311 Inpatient Births 529 61 Days Total Patient Days 39,490 4,978 Inpatient Patient Days 30,860 4,690 Outpatient Patient Days 8,630 288 Inpatient Discharge Days 30,762 4,690 PROFESSIONAL MG Professional Worked RVUs (including Anes) 678,650 82,292 MG Professional Total RVUs (including Anes) 1,103,783 131,272 MG Professional Arrived Visits (including Anes) 185,764 58,979 2,372 169 9,051 2,358 176 9,004 1,302 3,730 11,548 1,706 33,522 88,054 180,365 224 814 14,972 1,285 60,725 13,102 1,285 49,937 1,870 10,788 13,095 48,547 141,578 18,376 920,896 1,235,054 54,748 7,536 307,027 ANCILLARY Operating I Minor Rooms Total OR Cases 4,453 2,348 Total OR Hours 9,952 1,430 Total Procedure Room Minor Cases 512 908 Total Procedure Room Minor Hours 589 Procedures Total Cath Lab 1,218 Total EP 406 Total GI/Endoscopy 3,314 743 Total lnterventional Radiology 2,952 Total Radiation Oncology 9,244 1,440 Major Imaging Total MRI 5,005 901 Total CT Scan 11,798 3,185 Total Nuc Med + PET 1,627 520 Minor Imaging Total Rad Diagnostic 28,411 9,709 Total Ultrasound 6,943 2,128 Total Mammography 13,991 2,200 Lab Total Billed Lab Test 634,454 116,084 Pharmacy Total Pharmacy Doses 610,898 Total Prescriptions 47,877 1,923 8,724 2,487 13,868 1,248 2,668 951 1,540 644 1,862 271 677 2,706 6,763 1,317 4,269 1,682 12,366 2,259 145 8,310 6,134 474 21,591 634 401 3,182 13,301 2,338 53,759 2,566 11,637 3,529 19,720 233,725 24,735 1,008,998 411,776 1,022,674 47,877 File: Hospital St ats 2/23/2018!:SI PM Paae l of 1